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Gossip is discussing someone else's situation for the vicarious thrill in it. That means any sympathy is phony, and the topic is not one meant to edify those participating. What shouldn't count as gossip is when you share a story, even a very embarrassing one, that a friend happily cops to. This is the great benefit of friends, we can trade our embarrassments around. But there is no superiority or asymmetry. It's either his turn or your turn, and anyone who shares (with glee) their embarrassments has got a good sense of self anyway.
But the mean kind of gossip, like all bad behavior, is bad for participants. What happens, I'd argue, to people who enjoy putting down others, is that they get bound up in a impossible to maintain image of themselves-- as someone who could not be gossiped about. And life does not work that way, yet people spend lifetimes trying to live up to the impression they've given themselves.
And there is another tension created-- the little thrill from feeling superior, or from releasing the information someone would expect you to keep-- it leaves a hangover, doesn't it? And that is your adjustment to the image you'd like to have of yourself (fair and kind) and what the behavior implies.
It's easy to notice that the happier the person, the less gossip they engage in. You could put it the way Plato enables us to-- it can be addicted to focus on just the foibles of other people, and the way you can compare these people to you-- but if you are focussed on the foibles of people, you are limiting your perspective and will never develop properly or understand the point of being here.